An Outlook: The 114th Congress

Society of American Florists

The 114th Congress convened on January 6 with the largest Republican House majority since 1931 and a new Republican majority in the Senate. However, a smooth and cooperative period of legislating isn’t a given just because Republicans hold the majority on both sides of the Capitol. Quite the opposite, in fact. The next two years in Washington promise to be contentious and it will be more important than ever for constituents to make their positions known loud and clear.

Politics and 2016 will drive everything in Washington. Why? While the Republicans have a strong hold in the House that no one seriously questions, the Senate is a different story. There will be 34 Senate seats in play with an election in 2016. Republicans currently hold 24 of those seats, which is almost an exact reversal from the numbers in 2014. Democrats see an opportunity to reclaim control of the Senate if they can win just four or five seats. 

2016 is also a presidential election year. Without having to stand for another election, President Obama has much more freedom to act and maneuver, including exercising his veto power. The year 2016 may actually have started on November 20, 2014 with the president’s executive action on immigration.

It’s imperative that everyone in the floral industry remains vigilant and engaged. Here’s a quick look at what’s on tap for the coming year:

Affordable Care Act | Following action on the Save American Workers Act, which would define full-time as 40 hours per week, we expect the House and Senate will schedule votes to repeal the Affordable Care Act (ACA) in the first quarter of this year. Clearly, that will be vetoed by the president if passed by both chambers.

The Republican majority will then move to a strategy of voting on other separate bills to repeal or amend individual provisions of the law, including the elimination of the medical device tax—one of the various new taxes in the law to pay for expanded health care coverage—and the elimination of the individual mandate to purchase health insurance. Also, a March 31 deadline to fix reimbursement rates for doctors who see Medicare patients (sometimes referred to as the “doc fix”) may be an item that’s paired with a repeal of certain ACA provisions.

Potentially trumping all of this legislative activity will be the Supreme Court’s consideration of King vs. Burwell in March. Resolution of this case could negate federal subsidies for 11 million people from the 36 states that haven’t set up their own health care exchanges. This case will be decided in late June.

Immigration Reform | There’s virtually universal agreement that the system is broken and action must be taken, but there’s almost as much vehement disagreement as to what those actions should be.   

The furor over the Obama Administration’s November 20 executive action temporarily stopping the deportation of an estimated 4 million undocumented immigrants makes comprehensive immigration reform unlikely—but agriculture must continue to push for a solution, with an estimated 70% of its workers undocumented. Agricultural employers are also concerned that the executive action provides no incentive for people to remain in agriculture in order to attain temporary legal status.

Last month, Congress provided fiscal 2015 funding only through February 27 for the Department of Homeland Security, which will implement the president’s directives, giving the Republican-controlled Congress time to determine how to proceed. Rep. Robert B. Aderholt (R-AL), chairman of the House Agriculture Appropriations subcommittee, filed legislation to cut off funds for carrying out the executive actions and said his legislation would not only defund the actions, but would rescind the president’s authority to take similar actions in the future. 

SAF will continue to work with the Agriculture Workforce Coalition and the Agriculture Coalition for Immigration Reform to press for a long-term, legislative solution that provides work authorization for agriculture’s current experienced workforce and a new, flexible guest worker program for seasonal and year-round labor needs.

Tax Reform | President Obama and many members of Congress (and most Americans) advocate significant reform to our tax laws. The reality is that the details of tax reform are extremely complex and often divisive. President Obama is calling for tax reform for corporations, while Republicans also want reforms for small businesses and individuals.

This divide may be too far to bridge during this Congress. While some tax reform is possible in 2015, the most likely scenario is that 2015 is a year to lay the foundation for a push to fully reform the tax code in 2017 (post-2016 election). Expired tax provisions that were renewed for 2014 will be discussed, but likely not addressed until the end of the year.

Trade | Since midnight of July 31, 2013, flowers imported from Ecuador have been subject to import duties and there’s nothing in Congress to indicate that will change anytime soon.

However, despite continuing volatility on Capitol Hill, the environment for passing trade legislation in the 114th Congress appears positive. Sens. Hatch (R-UT) and Wyden (D-OR) and Reps. Ryan (R-WI) and Leven (D-MI), respectively, head up the Senate Finance Committee and the House Ways and Means Committee, both of which have jurisdiction over trade-related legislation.

Of key importance is the need for Congress to reauthorize Trade Promotion Authority (TPA), which technically expired in 2007. TPA gives the president the authority to negotiate trade agreements with other nations and assures that Congress can only approve a negotiated agreement by an up-or-down vote, with no amendments allowed. Without TPA, trading partners may be reluctant to enter into agreements with the U.S. when they know those agreements can be unilaterally amended by Congress.

If TPA moves in this Congress, it’s possible that renewal of the Generalized System of Preferences (GSP) or even ATPDEA might become part of a bigger legislative package. If this happens, it’s possible there might be some movement on duties currently in place on Ecuadorian product as a result of the lapse of the ATPDEA in July of 2013. However, politics and unforeseen international events always have a major impact on the direction trade agreements take.

For more information, contact Shawn McBurney at smcburney@safnow.org. GT